Social media platforms are accelerating economic growth and opportunity across the continent
A new study by Genesis Analytics commissioned by Facebook (FB) and aimed at exploring the impact of the digital economy on small- and medium-sized businesses (SMEs) has been conducted in 8 African countries – SA, Kenya, Senegal, Côte d’Ivoire, DR Congo, Nigeria, Ghana, and Mauritius. The survey explored the adoption and use of social media and messaging platforms; value to SMEs; barriers to usage; and the impact of the COVID. The focus was on the four FB apps – Facebook, Instagram, WhatsApp, and Messenger. The report shows that SMEs using any of the FB apps reported a higher frequency of being owned by women, while SMEs in the manufacturing sector ranked the ability to access new foreign markets as the most beneficial advantage of the apps.
The survey finds that social media platforms are powerful catalysts in the formation and growth of new SMEs. Some 73% use social media. 84% of those using at least one of the FB apps reported that it has been important in the growth of their business, while 77% said that their business is stronger today because of the FB apps, and 55% believe that apps helped them to start the business. The surveyed SMEs suggest that the apps are most useful in lowering barriers to entry, accessing markets, raising brand awareness, connecting with customers, increasing revenues, and reducing costs. The survey established a link between digital tools and business resilience during the COVID. 65% of the surveyed SMEs reported that they increased the use of social media and online messaging during the pandemic to communicate with customers, operate remotely, raise capital and make sales. Over half of the surveyed SMEs in 5 of the 8 countries report that social media helped the business to stay open. The report showed that digitally empowered SMEs are unlocking Africa’s youth opportunity. In addition, there was a higher frequency of being owned by women (36%) or having a slightly higher proportion of female employees, higher annual revenues, and being more optimistic about future revenues than non-users.
The report calls on governments and private companies to partner and grows a digital environment that can power small businesses to unlock Africa’s 3 rich opportunities. According to the report, digital tools are a powerful enabler of economic diversification and increased levels of trade. Most surveyed SMEs not using social media work in the more traditional primary sector, while those using the FB apps are skewed more toward services and manufacturing sectors. Finally, 67% of surveyed SMEs using the apps report that they have innovated their product or service offerings in the last 6 months based on information gathered through the apps.
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